Asia Summary and Highlights 5 Jan

Asia Session

The Politico reported US officials are planning for the US to respond to a wider, protracted Middle East war. The attacking of commercial ships in the Red Sea seems to have triggered the U.S. to respond with military action that they have restrained from in the past months, in order to not heighten geopolitical tension. A U.S. military action will no doubt raise global attention and be a headwind to risk asset for more uncertainty yet it is far too soon to suggest actual action is in play now. AUD/USD treads 0.12% lower to 0.6697 as USD receive haven bids and global risk sentiment tilting sour, NZD/USD followed 0.05% lower to 0.6231 while USD/CAD rose 0.1% despite oil recovering some Thursday losses.

Apart from the Middle East, North Korea has fired hundreds of shell toward South Korea border. Even with none landed on South Korea land, it is a sensitive time and create more uncertainty. U.S. Treasury Yields are performing mixed while JGB yields slip. USD/JPY continue to rebound and approached December high at 144.95. Elsewhere, EUR/USD is down 0.08% and GBP/USD is down 0.04%. 

North American session
The USD was generally firmer through the North American session, gaining ground primarily against the JPY. USD/JPY rose around 40 pips to 144.60. EUR/USD was not much changed at 1.0950, but the USD made small gains against the AUD and CAD as well. 
USD gains were helped by stronger than expected ADP employment data, which showed a 164k rise in December, and lower than expected initial and continuing claims data, which helped US yields rise.  The EUR was supported by German CPI coming in line with expectations after the early state data suggested potentially softer numbers.